ActewAGL loses govt contract

ActewAGL did secure two other government contracts which are worth about $6 million.

ABC News

ACT electricity provider ActewAGL has lost a major contract to supply electricity to its part-owner, the ACT Government.

The major contract was awarded to Queensland company ERM Power Retail, which began supplying energy to the government's major outlets on January 1.

It is believed the contract is worth about $16 million over two years.

ActewAGL did secure two other government contracts which are worth about $6 million.

Territory and Municipal Services Minister Shane Rattenbury says the decision was made by directorate representatives based on a tender process.

"I imagine ActewAGL are incredibly disappointed to lose this contract but it is a competitive process," he said.

"The decision to award the contract to ERM, I've been briefed by the officials, they offered the best value for money for the Territory and that's the basis on which they took their decision."

Treasurer Andrew Barr says he was surprised to hear the news as a shareholder, but says it will have very little impact on the Government's bottom line.

He says the ACT will save money due to the reduction in electricity prices.

"Our business here is to get the best price for electricity," he said.

ActewAGL head of marketing Paul Walshe says the company will continue to sponsor Canberra centenary events.

He says there are no plans to cancel sponsorship commitments this financial year.

"It's a tough business retail electricity. You win some contracts and lose some contracts and from our community sponsorship point of view we'll continue with our current community sponsorship program," he said.

"Like any company we have a budget, we have a sponsorship committee, and a review process where we review every sponsorship."

In a statement, ActewAGL acting chief executive officer John Knox says the company remains competitive in the ACT market, demonstrated by steady growth in customer numbers.

"We remain committed to our customers, to supporting our local community through our sponsorships program, delivering excellent customer service and helping our customers manage their energy costs," he said.